Etesh P Jain Vs ITO (ITAT Mumbai)
AO treated alleged bogus purchases of ₹68,08,698 as non-genuine & added 100%. CIT(A) restricted disallowance to 12.5% based on available evidence, & in further appeal Tribunal restricted it to 10% (₹6,80,869) holding that purchases were genuine but unverifiable.
AO thereafter levied penalty u/s 271(1)(c) @100% of tax. Before Tribunal, Assessee argued that addition was purely on estimated basis & therefore no concealment could be alleged. Tribunal referred to Bombay HC judgment in PCIT v. Colo Colours Pvt Ltd (178 taxmann.com 458) & Mumbai ITAT in Kamal H Shah (ITA 5542/Mum/2024), which held that penalty cannot be levied where additions are based on estimates. Tribunal held that since the entire basis of disallowance was estimation & no factual concealment or inaccurate particulars were found, penalty was unsustainable. Penalty orders for all three years deleted. Appeals allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
A bunch of 3 appeals are filed by the same assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi[(hereinafter called ‘Ld.CIT(A)] passed under section 250 of the Income-tax Act, 1961 ( in short, ‘the Act’) for the Assessment Years 2009-10 to 2011-12, date of order 16/07/2025. The impugned orders were emanated from the orders of the Ld. Income-tax Officer, Ward 1(1), Mumbai (in short, ‘Ld AO’), order passed U/S 271(1)(c) of the Act, date of orders 30/03/2018.
